[Jackie Lange]

Jackie Lange

The most motivated seller is the owner of a vacant house. If they are making payments on that vacant house they are extremely motivated. But even if the house is free and clear, there are still monthly expenses like electicity, taxes, insurance, yard work.

Anytime you see a vacant looking house you need to contact the owner. They may sell with seller financing, sell subject to the mortgage, do a master lease or just get an option then do a highest bidder sale. There are many ways to profit from a vacant house.

To find vacant houses,

1. search the FSBO web sites for houses that hae no furniture.
2. talk to postal workers, fed ex drivers, etc
3. homeowner’s insurance is not valid for a vacant house after 30 days — so insurance companies know which houses are vacant too. They won’t give you a list but they may pass your name & # on to the owner
4. dead meters — no electricity or gas going to the house
5. code enforcement – red tagged house

What other ideas do you have for finding vacant houses?

[Larry Niskey]

Larry Niskey

I read that wholesale flips and options are a good way to start. I am trying to get a “terms” type deal to assign to a retail buyer.

I’ve haven’t had any success yet in finding a motivated that will entertain a “terms” type deal or owner financing. They want cash or either 20% down.

Since I’m on a very tight budget I’ve been contacting FSBO’s on Craigslist and on-line websites for several months now with no success. I also placed ads on Craigslist to get motivated sellers to contact me but got no responses. With no leads there is no business.

This one “real estate expert” said that 8 out of 10 people will say no. Another “real estate expert” claims that 36% will say yes. From my experience and market about 99% say no. I’m thinking maybe this market is not a good market (Wash DC /Baltimore) to be doing creative real estate and “terms” deals.

I was talking with this one fellow and he gets some many leads coming in but he said that he spends $18,000/month on marketing.

Is there a way for someone on a tight budget to get leads coming in or does it really take a lot of money to get these leads coming in ? Any help and thoughts on this would be greatly appreciated. Thanks!

[DON WEDE]

DON WEDE

My suggestion is to target areas that are the types of home you are looking for age, condition, and price. Then drive the neighborhoods. I did this Thanksgiving, Christmas, and New Years. ( I know what a life). This took in a population of 13,000. I took down the address or pin point location on every vacant house, FSBO, For Rent, and with Realtor signs but vacant. Then went to the court house to see where the Real Estate Taxes are sent.

I then sent them a post card that says.
“I WOULD LOVE TO RENT YOUR HOUSE” I NOTICED THAT IT SEEMED VACANT. My name address and telephone number. Remember on the return address make sure you put on the last line RETURN SERVICE REQUESTED.

Be prepared for your phone to ring. It will. My pitch to them is very simple. I tell them right up front that the card was sent to get them to call me. I explain I buy houses and rent them and occasionally by the resell. Also I have helped out some people who have moved out of town and could not sell their house and some people who are burn out landlords and are feed up with rental properties. I tell them how much I enjoy being a landlord. I explain that I will rent up the homes and take care of all aspects of being a landlord and pass through 90% of all the rents collected. I explain that I might be interested in either alternatives for their property. That is not a script just the jest of the conversation.

Don Wede

[D Graber]

D Graber

.
I didn’t see anyone mentioning lists of houses with property taxes in arrears. Some of those houses might be vacant, but some of them might just indicate troubled situations — maybe motivated owners in pre-vacancy mode.

–Dee

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[Paul Thompson]

Paul Thompson

I’ve started door knocking. When I find the vacant properties I make note of them and ask the neighbors if they know who owns it. So far nobody has had the number of the owner. And trying to figure out what my strategy is going to be to reach out to them. I can get the billing address online. I like the idea of sending them a card saying I’d like to rent your vacant house.

Dee how do you find the delinquent taxes in your area. I’m not real conversant with my county’s system.

Thanks

[D Graber]

D Graber

.
Toolsoup, it wouldn’t do you much good to learn how my county handles property taxes in arrears information — because your county [there are a little over 3,000 counties] probably does it differently. Such a list might be free, or they might charge a bit for it. It might be available online or via email, or maybe on paper only. Either a phone call or a personal visit could get you started, along with a little applied diplomacy.

There are other complexities. Some states, like Texas, have a rule that whoever is on title when the county files (to auction off the property) gets whatever rights there might be [occasionally there might be some redemption rights, eg.] following the county’s auction. That means in such states, you have to make and record a deal with that property owner in arrears BEFORE such a filing takes place — IF those post-auction rights are of interest to you.

–Dee
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[Jackie Lange]

Jackie Lange

if you tell a seller, I’d like to buy your house with terms, they don’t have a clue what you are talking about.
When talking to civilians, you need to explain things in language they understand.

It is easier to get sellers to say yes to your term offer if they don’t have a whole lot of equity which they were expecting to get out of the house.

An example

House is worth $165,000
they own $150,000 with piti of $1200

Some equity but not much.
If they paid a real estate agent 6% to sell their house ($9900) plus other closing costs ($3000), they would have not hardly any cash out.

So, it is easy to tell this seller, instead of waiting 6 months to sell your house (or longer), paying $9900 in commission, and paying $3000 in closing costs, I will buy your house this week by taking over your mortgage payments. I can start making the February mortgage payment – will that help!? You will have no real estate commissions to pay, no closing costs… and you can take what you want then leave the rest in the house. We can close in 3 days or when you are ready.

See how that seller would be more likely to say YES to your offer than someone who has a house worth $165,000 but only owes $65,000. They have $100,000 in equity.

Bottom line, target the right sellers with your offer to get them to say yes.

Back to that $165,000 house with a $150,000 mortgage. what are your exit strategies?

1. you could just rent it out for $1500 per month for a $300 a month cash flow

2. you could sell it with a lease option getting $10,000 down then $300 a month cash flow

3. you could sell it with seller financing that wraps the underlying loan, a highest bidder sale would help get the down payment up up UP to maybe $30,000 down.

Or

instead of buying, you could master lease the property then sublease it. Prove to the seller that you will make payments on time. After 6-12 months talk to them about buying it with seller financing.

So, how do you find a motivated seller who would let you buy their house by taking over the payments on an existing mortgage? A vacant house is always a good indication of a motavated seller. But, like the example above, it needs to be a house that has equity but not too much equity so a DEED DATE that is not too old, like 5-7 years, will be a good indicator. If the deed date is 10-15 years old, they have a lot more equity and will be less likely to let you buy their house by taking over the mortgage payments.

Hope this helps

Jackie